INCREASE IN PRSI RATE HAS STOPPED JOB CREATION IN RETAIL SMES.

INCREASE IN PRSI RATE HAS STOPPED JOB CREATION IN RETAIL SMES.

Retail sales continue to struggle.

Retailers’ Cost base must be decreased.

ISME, Friday 27th June 2014.

On the release of the Retail Sales figures by the CSO today (27th June), ISME, the Irish Small & Medium Enterprises Association, warned that the costs of the retail sector continue to rise and immediate Government intervention is necessary. Thousands of jobs remain at risk in the largest business sector, despite the gradual and tentative improvement in the economy.
Retail Sales figures for May show an increase of 0.9% in volume in the month and 0.6% in value. There has been an increase of 6.2% in volume and 4.1% in value in the year. When motor sales are excluded sales volume was up 3.4% and sales value was up 1.4% in the year.
Mark Fielding, ISME CEO, commented, “Government must take immediate action on rates and local charges and force local councils to implement cost reductions. The high cost base of retailers is unsustainable and acting as a brake on the recovery and must be reduced. The increase in employer’s PRSI from 4.25% to 8.5% has not alone curtailed recruitment but is threatening existing jobs, particularly in retail”. “The proposed new fees for retailers who sell cigarettes are another example of out-of-touch Government. Imposing a ‘punishment tax’ on retailers will place an additional burden on already struggling businesses, threatening their viability while driving smokers to contraband and it is ludicrous for the health Minister to pursue this.”
The main issues are:

Excessive retail business costs, including the ‘punishment tax’ on cigarette retailers.

The increase in employers’ PRSI.

Surge in Shadow Economy.

Introduction of a Code of Practice, with an ombudsman for the sector.

Review of the effect of the abolition of the Groceries Order on prices.

Commercial rates, development contributions and unrealistic rents.

Town centre revitalization.

Social welfare anomalies and inflexibilities.

Lack of bank credit availability for retail SMEs.

Sector specific training.

“While the consumer is still reticent to spend, every effort must be made to curtail retail costs. It is ridiculous that Government is responsible for cost increases which are stopping job creation. Retailers are some of the most significant contributors to the economy and their plight must be taken seriously”, Fielding concluded.